Copper Jumps to 10-Month High as Manufacturing Buoys Outlook

LONDON, Aug. 4 -- Copper prices soared to the highest in 10 months as gains in U.S. and Chinese manufacturing signaled rising demand for industrial materials.

    Chinese manufacturing expanded last month at its fastest pace in a year and U.S. factory activity reached an 11-month high, reports showed today. Copper has surged 94 percent this year on speculation that a global economic recovery will boost demand for the metal used in pipes and wires.

    "The No. 1 factor today was the positive economic data," said Joel Crane, a Deutsche Bank AG commodities analyst in New York. "It adds more fuel to the fire of the market really believing in the economic recovery."

    Copper futures for September delivery jumped 11.5 cents, or 4.4 percent, to $2.7385 a pound on the Comex division of the New York Mercantile Exchange. After the close of floor trading, the price reached $2.769, the highest for a most-active contract since Oct. 2.

    A decline in the dollar also boosted commodity prices, Crane said. The greenback fell to the lowest since late September against a basket of six major currencies.

    "The economic optimism, coupled with the massive move in the dollar, created the right recipe for commodities today," Crane said.

    The Reuters/Jefferies CRB Index of 19 raw materials jumped as much as 3.8 percent to the highest since Nov. 6.

    Copper for delivery in three months surged $281, or 4.9 percent, to $6,000 a metric ton ($2.72 a pound) on the London Metal Exchange. Earlier, the price reached $6,040.50, the highest since Oct. 2.

    Surpassing $6,000 gives copper "the ability to see a move through to $6,400," Michael Jansen, an analyst at JPMorgan Securities Ltd. in London, said in a report. The gain, following July's 15 percent advance, may bring "forward consumer restocking," Jansen said.

    Nickel, zinc, aluminum, lead and tin also rose in London.

    (Source: Bloomberg)